EXHIBIT 10.4(a)
CONSULTING AGREEMENT
This Consulting Agreement (the "Agreement") is entered into effective as
of December 28, 2001, by and between AspenBio, Inc., a Colorado corporation (the
"Company") and Cambridge Holdings, Ltd., a Colorado corporation ("Consultant").
RECITALS. The Company and Consultant have entered into that certain
Securities Purchase Agreement of even date hereof (the "Purchase Agreement").
Unless otherwise defined herein, capitalized terms used herein shall have the
meanings given such terms in the Purchase Agreement. The Company is desirous of
considering joint venture and other strategic arrangements and of becoming a
reporting company under the provisions of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). The Company would like to
file a registration statement with the SEC as soon as possible, to register for
resale shares held by certain of the Company's shareholders and to distribute to
the Consultant's shareholders the Company's shares acquired by the Consultant
pursuant to the Purchase Agreement. The parties hereto desire that Consultant
act as a consultant for the Company and provide advice and counsel to the
Company pursuant to the terms and conditions hereof. In consideration of these
recitals which are hereby incorporated herein, of the mutual covenants herein
set forth, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree as follows:
1. CONSULTING PERIOD. The term of Consultant's engagement under this
Agreement shall begin on the date hereof and shall continue until September 30,
2002, unless (i) the Company earlier becomes a reporting company under the
provisions of Exchange Act at which point this Agreement shall terminate; or
(ii) this Agreement is sooner terminated in accordance with the terms hereof or
by the mutual agreement of the parties hereto (the "Consulting Period").
2. COMPENSATION.
(a) As the sole consideration for the services to be
provided hereunder, the Company agrees to deliver to Consultant or to
Consultant's designees as set forth on Schedule 2(a) to this Agreement, the
Warrants described in the Purchase Agreement.
(b) The Company shall reimburse Consultant solely for the
reasonable and necessary legal expenses and fees incurred by the Consultant in
the performance of Consultant's duties under Section 4(a) herein up to a maximum
of $100,000.
3. TERMINATION. The Company may terminate the Consulting Period and this
Agreement at any time upon five (5) days prior written notice to Consultant for
any of the following reasons: (a) the failure of the Company to become a
reporting company under the provisions of the Exchange Act by September 30,
2002; (b) Consultant's willful failure or refusal to perform adequately the
duties as required by this Agreement after notice and an opportunity to cure;
(c) Consultant's appropriation (or attempted appropriation) of a business
opportunity of the Company; (d) any actions undertaken in competition with, or
for the purpose of aiding a competitor of the Company; or (e) any other material
breach of any material covenant of this Agreement by Consultant. In the event
that the Company fails to become a reporting company under the provisions of the
Exchange Act by September 30, 2002, the Consultant shall automatically forfeit
the 330,000 Warrants. In the event of termination by the Consultant or by the
Company for any reason other than the failure of the Company to become a
reporting company under the provisions of the Exchange Act by September 30,
2002, in the absence of a material breach by the Company, the Consultant shall
forfeit 330,000 Warrants delivered by the Company to the Consultant
pursuant to the Purchase Agreement. In the event of termination, the sole remedy
of the Company for breach of this Agreement shall be the Consultant's forfeiture
of the 330,000 Warrants.
4. DUTIES. Consultant shall report to the President of the Company.
During the Consulting Period, Consultant shall:
(a) use its best efforts to assist the Company in the
Company's efforts to become a reporting company under the provisions of the
Exchange Act by September 30, 2002;
(b) introduce and promote the Company to potential joint
venture and strategic alliance partners; and
(c) assist Company with introductions and presentations to
brokerage firms and prospective market makers.
5. INDEPENDENT CONTRACTOR. Consultant acknowledges that Consultant is an
independent contractor and not an employee of the Company. The Consultant shall
be responsible for the payment of any taxes, including, without limitation,
federal, state, and local personal and business income taxes, sales and use
taxes, other business taxes and licenses fees arising out if its activities.
Consultant is not in any way responsible for the operation or management of the
Company or any of its affiliates.
6. COOPERATION. The Company agrees to use its reasonable best efforts to
ensure that all of the Company's employees cooperate with Consultant to enable
Consultant to perform its duties hereunder.
7. CONFIDENTIALITY. As a condition precedent to this Agreement,
Consultant acknowledges that it will execute and be bound by the terms of that
certain Confidentiality Agreement set forth as Exhibit G to the Purchase
Agreement.
8. NONCOMPETITION COVENANT Consultant agrees that Consultant will not,
during the Consulting Period, and for a period of one (1) year after the
termination of such Consulting Period, regardless of the reason for termination,
in the United States of America (the "Restricted Area"), directly or indirectly,
engage in any business that is similar to or competitive with the business of
the Company, as now conducted or as conducted at any time during the Consulting
Period. Competition within the Restricted Area will include working within the
Restricted Area and making any offer or sale of any product competitive with
products offered by the Company to any customer located within the Restricted
Area, even though the business of producing, processing, shipping, or marketing
such products may be located outside the Restricted Area. For purposes of this
Agreement, direct or indirect competition will include but not be limited to
competition as a sole proprietor, partner, corporate officer, director, manager,
member, shareholder, employee, consultant, agent, independent contractor,
trustee, guarantor, advisor, lender, or in any other capacity whatsoever
pursuant to which Consultant holds any beneficial interest in a competitor,
derives any income or other benefit from a competitor, or provides any service,
advice, support (financial or otherwise), or assistance of any type whatsoever
to a competitor.
9. MISCELLANEOUS.
a. AMENDMENT. This Agreement may not be amended or modified
except by an instrument in writing signed by and on behalf of both of the
parties hereto.
b. ATTORNEYS' FEES. If any party shall commence any action or
proceeding against another that arises out of the provisions hereof or to
recover damages as the result of the alleged breach of any of the provisions
hereof, the prevailing party therein shall be entitled to recover from the
-2-
nonprevailing party (and the court shall award to the prevailing party) all
reasonable costs incurred in connection therewith, including reasonable
attorneys' fees.
c. EQUITABLE RELIEF. Consultant acknowledges that Consultant
and/or its affiliates will be irreparably harmed by any breach of Section 8,
that monetary damages would be inadequate and that Consultant and/or its
affiliates shall have the right to have an injunction or other equitable
remedies imposed in relief of, or to prevent or restrain, such breach. The
Consultant agrees that Consultant and/or its affiliates shall also be entitled
to any and all other relief available under law or equity for such breach.
d. COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed an original, and all of which when affixed
together shall constitute but one and the same instrument. Signatures exchanged
by facsimile shall be deemed original signatures for all purposes.
e. GOVERNING LAW; VENUE. This Agreement shall be construed,
enforced, and interpreted in accordance with the laws of the state of Colorado
(without regard to its conflicts of laws doctrines). In the event of any dispute
arising out of this Agreement, the parties hereto consent to the exclusive
jurisdiction of any court of competent jurisdiction in the Denver, Colorado
metropolitan area, and submit to the jurisdiction of such court regardless of
their residence.
f. SEVERABILITY. In the event that any provision of this
Agreement is held to be invalid, illegal, prohibited or unenforceable by any
court or other authority of competent jurisdiction, such provision shall be
ineffective only to the extent of such prohibition, illegality, or invalidity,
without invalidating or affecting in any manner the remainder of such provision
or the remaining terms or provisions of this Agreement.
g. SUCCESSORS AND ASSIGNS. This Agreement is binding upon and
shall inure to the benefit of the parties hereto and their respective
successors, heirs, legal representatives, and permitted assigns. The duties,
covenants and services to be provided by Consultant hereunder are personal in
nature and shall be provided exclusively by Consultant, without assignment or
delegation. The Company may not assign this Agreement without the prior written
consent of Consultant.
[SIGNATURE PAGE TO FOLLOW]
-3-
IN WITNESS WHEREOF, the parties have duly executed this Agreement
effective as of the day and year first above written.
CONSULTANT: COMPANY:
CAMBRIDGE HOLDINGS, LTD., ASPENBIO, INC.,
a Colorado corporation a Colorado corporation
By: By:
--------------------------------- ---------------------------------
Xxxx Xxxxx, President Xxxxx Xxxxx, President
-4-
SCHEDULE 2(a)
PERMITTED DESIGNEES
Xxxx Xxxxx
Xxx Xxxxxxxxxx
Xxxx XxXxxxxxx
Xxxx Xxxxxxxxx
Xxxxx Xxxxxxx
Xxxxxx Xxxxxxx
-5-
